Xiaomi acquires 1,500 patents from Microsoft for US expansion

Xiaomi will need to have more patents under its nose to minimize chances of getting into a patent dispute once it enters the US market.

Xiaomi has acquired about 1,500 patents from Microsoft, which is a step towards the Chinese manufacturer’s planned foray into the US market.

No financial details of the deal are known as of now. However, Microsoft has confirmed that there is a patent licensing aspect to the deal besides the Chinese company’s outright purchase. Apparently, both Microsoft and Xiaomi have taken a license to several patents held by each other.

The patents acquired by Xiaomi deal with “wireless communications, video, cloud, and multimedia.” Xiaomi needs to have the said patents in its kitty to ensure its entry into the US market does not lead to any legal tangles about smartphone patents.

Another aspect of the deal is that several of Xiaomi’s Android phone and tablet devices will be pre-installed with Microsoft Office and Skype apps starting September 2016. Those include devices such as Mi 5, Mi Max, Mi 4s, Redmi Note 3 and Redmi 3.

Microsoft is keen to have more Android manufacturers onboard, that agree to pay it royalties for using the Google OS. The Redmond-based company is claiming several of Android’s features are based on its technology, and it already collects a billion dollar a year from Samsung towards that.

Xiaomi’s devices offer more features and are of a better quality than its price might suggest. While that led to increased sale, margin continued to be slim. In fact, increased competition from domestic manufacturers such as Huawei, Oppo and Vivo has left Xiaomi with very little space to operate in.

Hugo Barra, the Vice President of international operations at Xiaomi recently said the company’s primary and immediate focus will be to expand in India as well as the US, and it has to ward off competition from its brethren before making it big.

The strategy for Xiaomi is also apparent – to build upon its strengths in the markets it already operates in while avoiding a US launch right away that otherwise would not only be costlier but also carries the risk of patent wars.